South African Data Research Articles

A model of HIV/AIDS population dynamics including ARV treatment and pre-exposure prophylaxis

Antiretroviral treatment (ART) and oral pre-exposure prophylaxis (PrEP) have recently been used efficiently in management of HIV infection. Pre-exposure prophylaxis consists in the use of an antiretroviral medication to prevent the acquisition of HIV infection by uninfected individuals. We propose a new model for the transmission of HIV/AIDS including ART and PrEP. Our model can be used to test the effects of ART and of the uptake of PrEP in a given population, as we demonstrate through simulations. The model can also be used to estimate future projections of HIV prevalence. We prove global stability of the disease-free equilibrium. We also prove global stability of the endemic equilibrium for the most general case of the model, i.e., which allows for PrEP individuals to default. We include insightful simulations based on recently published South-African data.

The winner takes it all: Outperformance drives subsequent flows in South African Unit Trust Funds

ABSTRACTThe relationship between unit trust (mutual fund) performance and subsequent investment flows into and out of funds has been the focus of many international studies. Emerging markets, which are characterised by higher risk, weaker institutions, volatile economies and fewer participants, provide an attractive opportunity to examine the flow-performance problem in the context of higher arbitrage costs.This study builds on the findings in the literature of the flow-performance relationship and aims to examine in more detail, and to quantify, the inflow into funds which outperform. The flow-performance relationship is important for investment businesses to understand because of the significant implications this has on the profitability of funds.The research applies a portfolio time-series methodology to Morningstar's South African fund data, using a buy-and-hold analysis. Two unit trust categories are tested, namely General Equity and Multi-asset High Equity funds, and within each category, single manager funds and fund of funds are tested separately.Funds are ranked by their past performance over an optimised 14-month look-back period, and assigned into quintiles. Net flows into each fund in the subsequent quarter are then determined, and the process rolled over on a quarterly basis from 2000 to 2015. We find convincing evidence from an emerging market perspective that equity funds need to perform in the top quintile to attract funds, and observe that relative performance to peers is more important to investors than performance relative to other benchmarks. One additional inference is that the South African unit trust industry is set to face consolidation.

Are the determinants of banks’ and insurers’ capital structures homogeneous? Evidence using South African data

This paper investigates the factors that determine capital structures of financial firms using two separate samples of banks and insurance companies and draws comparisons therefrom. It utilizes two...

The underbelly of the Berea: Challenges to orthodox planning for the creation of sustainable suburban neighbourhoods in South Africa

Sustainable neighbourhood development is a global urban planning policy concern for the 21 st century. In the global South, these concerns persist alongside increasing population and poverty levels in cities. In South Africa’s established former apartheid neighbourhoods, the challenges of creating sustainable neighbourhoods from the current post-colonial neighbourhood are unclear and contradictory. Former largely mono-functional suburban neighbourhoods of the apartheid period are undergoing changes in form, function and demography. Using the case of Berea suburban neighbourhood in the metropolitan city of eThekwini (Durban), the article explores the responsiveness of orthodox land-use planning to sustainable neighbourhood change from 1994. It focuses on a historical review of orthodox planning vis-a-vis recent policy and land-use change dynamics in the Berea. Data used include a content analysis of the Berea General Plans from 1857, Town Planning Schemes and related documents, purposively selected interviews, observations, GIS mapping of planning applications, and analysis based on South African demographic census data from 2001 to 2011. The article concludes that former largely monofunctional orthodox suburban neighbourhood planning is insufficiently responsive to heterogeneity trends on the Berea. Keywords: Informality, neighbourhood change, orthodox planning, planning policy, physical form and function, sustainable neighbourhood planning

The Influence of Atmospheric Rivers over the South Atlantic on Winter Rainfall in South Africa

Abstract A climatology of atmospheric rivers (ARs) impinging on the west coast of South Africa (29°–34.5°S) during the austral winter months (April–September) was developed for the period 1979–2014 using an automated detection algorithm and two reanalysis products as input. The two products show relatively good agreement, with 10–15 persistent ARs (lasting 18 h or longer) occurring on average per winter and nearly two-thirds of these systems occurring poleward of 35°S. The relationship between persistent AR activity and winter rainfall is demonstrated using South African Weather Service rainfall data. Most stations positioned in areas of high topography contained the highest percentage of rainfall contributed by persistent ARs, whereas stations downwind, to the east of the major topographic barriers, had the lowest contributions. Extreme rainfall days in the region are also ranked by their magnitude and spatial extent. The results suggest that although persistent ARs are important contributors to heavy rainfall events, they are not necessarily a prerequisite. It is found that around 70% of the top 50 daily winter rainfall extremes in South Africa were in some way linked to ARs (both persistent and nonpersistent). Overall, the findings of this study support similar investigations on ARs in the North Atlantic and North Pacific.

The Ross Recovery Theorem with a Regularised Multivariate Markov Chain

Recently, Ross (2015) derived a theorem, namely the Recovery Theorem, that allows for the recovery of the pricing kernel and real-world asset distribution, under particular assumptions, from a forward-looking risk neutral distribution. However, recovering the real-world distribution involves solving two ill-posed problems. In this paper, we introduce and test the accuracy of a regularised multivariate mixture distribution to recover the real-world distribution. In addition, we show that this method improves the estimation accuracy of the real-world distribution. Furthermore, we carry out an empirical study, using weekly South African Top40 option trade data, to show that the recovered distribution is in line with economic theory.

Correlates of Correct HIV Knowledge and Myth Rejection in South Africa: The 2012 National HIV Prevalence, Incidence and Behavior Survey

Introduction: Correct knowledge of HIV transmission and prevention and myth rejection is a prerequisite to practicing safer behavior and important for reducing the risk of new infections. This study investigates the association between correct knowledge of HIV transmission, prevention and myth rejection with socio-demographic factors and HIV-related behavioral risk practices in South Africa. Methods: The study used the 2012 South African national HIV prevalence, incidence and behavior survey data based on a multistage cross-sectional design. Univariate and multivariate logistic regression models were used to examine correlates of correct HIV knowledge and myth rejection. Results: Of 26,544 sub-sample of youth and adults data (15 years and older) who responded to the HIV knowledge question, only 26.8% reported correct knowing of HIV transmission, prevention and rejection of all myths about HIV. In the final model significant negative predictors of correct HIV knowledge, prevention and myth rejection included residing in rural informal areas (OR=0.68 (95% CI: 0.48- 0.95), p=0.027), and being a harmful alcohol drinker (OR= 0.18 (95% CI: 0.06- 1.29), p=0.001) while sexual debut at 15 years and older (OR=1.8 (95 CI: 1.12- 2.91), p= 0.015) was a significant positive predictor of correct HIV knowledge and myth rejection. Conclusion: The findings confirms that levels of HIV knowledge can either prevent individuals from making informed choices and take appropriate actions aimed at preventing the infection or make people to take precautions to protect themselves. Efforts to promote HIV knowledge, prevention and myth rejection in the general population should be strengthened given the declining HIV knowledge levels in the country.

Estimation of extreme inter-day changes to peak electricity demand using Markov chain analysis: A comparative analysis with extreme value theory

Uncertainty in electricity demand is caused by many factors. Large changes are usually attributed to extreme weather conditions and the general random usage of electricity by consumers. More understanding requires a detailed analysis using a stochastic process approach. This paper presents a Markov chain analysis to determine stationary distributions (steady state probabilities) of large daily changes in peak electricity demand. Such large changes pose challenges to system operators in the scheduling and dispatching of electrical energy to consumers. The analysis used on South African daily peak electricity demand data from 2000 to 2011 and on a simple two-state discrete-time Markov chain modelling framework was adopted to estimate steady-state probabilities of two states: positive inter-day changes (increases) and negative inter-day changes (decreases). This was extended to a three-state Markov chain by distinguishing small positive changes and extreme large positive changes. For the negative changes, a decrease state was defined. Empirical results showed that the steady state probability for an increase was 0.4022 for the two-state problem, giving a return period of 2.5 days. For the three state problem, the steady state probability of an extreme increase was 0.0234 with a return period of 43 days, giving approximately nine days in a year that experience extreme inter-day increases in electricity demand. Such an analysis was found to be important for planning, load shifting, load flow analysis and scheduling of electricity, particularly during peak periods.

Forecasting medium-term electricity demand in a South African electric power supply system

The paper discusses an application of generalised additive models (GAMs) in predicting medium-term hourly electricity demand using South African data for 2009 to 2013. Variable selection was done using least absolute shrinkage and selection operator (Lasso) via hierarchical interactions, resulting in a model called GAM-Lasso. The GAM-Lasso model was then extended by including tensor product interactions to yield a second model, called GAM- -Lasso. Comparative analyses of these two models were done with a gradient-boosting model to act as a benchmark model and the third model. The forecasts from the three models were combined using a forecast combination algorithm where the average loss suffered by the models was based on the pinball loss function. The results showed significantly improved accuracy of forecasts, making this study a useful tool for decision-makers and system operators in power utility companies, particularly in maintenance planning including medium-term risk assessment. A major contribution of this paper is the inclusion of a nonlinear trend. Another contribution is the inclusion of temperature based on two thermal regions of South Africa.

Funeral Insurance: An Inter-Generational Commitment Device?

Funeral insurance is a global phenomenon that has existed throughout history and remains hugely popular in Africa today. Yet as a distinct financial device it has received little attention. The question is why it seems, in many contexts, to be preferred over standard life insurance even though the latter is a more flexible product. This paper presents a simple model in which funeral insurance differs from life insurance in that there is a constraint on how the payout is spent. Funeral insurance can therefore serve as an intergenerational commitment device. The model’s key prediction is consistent with South African household data.

Income Dynamics, Assets and Poverty Traps in South Africa

This paper examines income dynamics and the existence of poverty traps in South Africa between 2010 and 2012 using panel data from the first three waves of the National Income Dynamics Study. In order to separate structural trends in income from stochastic shocks and measurement error, the paper makes use of an asset-based approach to estimate the shape of structural income dynamics in order to test for the existence of one or more dynamic equilibrium points. Contrary to earlier findings on South African data from 1993 and 1998, the results do not provide evidence for the existence of an asset-based poverty trap. Instead, the results seem to indicate the existence of a low-level equilibrium beyond which structural income remains very persistent. The robustness of the results is confirmed by making use of control functions in order to correct for any measurement error which may exist in the data on assets.

Multilevel analysis of infant mortality and its risk factors in South Africa

The study analyzed infant mortality and its risk factors in South Africa. It aimed to examine infant mortality in the country by taking into account the hierarchical nature of the problem and investigate the with-in country variation in modeling. In addition to the usual individual level risk factors of infant mortality, living standard, mother’s education, and income inequality were defined at municipal level, while HIV prevalence was fixed at province level. A multilevel logistic regression model was then fitted with Bayesian MCMC parameter estimation procedure using the 2011 South African census data. Most of the demographic and socioeconomic variables identified at individual level were found significant. More remarkably, the result indicated that communities with better living standard and women's education were associated with lower infant mortality rates, while higher income inequality and HIV prevalence in the communities were associated higher levels of infant mortality. The changes in infants’ odds of death were estimated to be 26%, -21%, 13% and 8% respectively for HIV, women’s education, income inequality and level of the living standard. In addition, unobservable municipal and province level random effects significantly affected the level of infant mortality rates.

Gender of household head and the digital divide in South Africa’s settlements

In South Africa, female household headship is sometimes shown as an indicator of economic disadvantage. As a result, female-headed households (FHHs) are expected to have limited access to information communication technologies (ICTs). This study analyzed the concept of the digital divide by the gender of the household head in South African settlements based on South Africa’s annual General Household Survey data sets from 2011 to 2014, and the 2011 South African Census data. Tetrachoric correlation coefficients were used to examine the relationship between the gender of household head and access to various forms of ICTs in South African settlements. The results of the study show that for some technologies, female household headship is more closely correlated to access to ICTs for FHHs in remote tribal rural areas compared to FHHs in the more developed or more accessible informal urban areas and formal rural areas. The study shows the confounding effect of the household’s location of residence on the relationship between the gender of the household head and household access to ICTs in South Africa. The income of the household head rather than their gender is revealed as a major determinant of household access to ICTs.

Neonatal sepsis: Highlighting the principles of diagnosis and management

Neonatal sepsis is a clinical syndrome consisting of nonspecific symptoms and signs of infection, accompanied by a bacteraemia in the first 28 days of life. The risk of neonatal sepsis and death increases with decreasing birth weight and gestational age. South African data have reported the overall incidence of neonatal sepsis to be 8.5 - 10%, with late-onset sepsis accounting for most of these infections. The diagnosis of neonatal sepsis is not always straightforward, and the initiation and continuation of antimicrobials in these situations relies on good clinical judgment. The need for empirical antimicrobials is driven by the existence of risk factors for early-onset sepsis and clinical symptoms and signs of late-onset sepsis. Antimicrobial stewardship programmes should be in place to guide clinicians to either stop, change, or continue antimicrobials. Institution-specific knowledge of the most common pathogens and the antimicrobial susceptibility pattern is important to prevent the emergence of further antimicrobial resistance.

Reducing stock-outs of essential tuberculosis medicines: a system dynamics modelling approach to supply chain management.

The under-performance of supply chains presents a significant hindrance to disease control in developing countries. Stock-outs of essential medicines lead to treatment interruption which can force changes in patient drug regimens, drive drug resistance and increase mortality. This study is one of few to quantitatively evaluate the effectiveness of supply chain policies in reducing shortages and costs. This study develops a systems dynamics simulation model of the downstream supply chain for amikacin, a second-line tuberculosis drug using 10 years of South African data. We evaluate current supply chain performance in terms of reliability, responsiveness and agility, following the widely-used Supply Chain Operation Reference framework. We simulate 141 scenarios that represent different combinations of supplier characteristics, inventory management strategies and demand forecasting methods to identify the Pareto optimal set of management policies that jointly minimize the number of shortages and total cost. Despite long supplier lead times and unpredictable demand, the amikacin supply chain is 98% reliable and agile enough to accommodate a 20% increase in demand without a shortage. However, this is accomplished by overstocking amikacin by 167%, which incurs high holding costs. The responsiveness of suppliers is low: only 57% of orders are delivered to the central provincial drug depot within one month. We identify three Pareto optimal safety stock management policies. Short supplier lead time can produce Pareto optimal outcomes even in the absence of other optimal policies. This study produces concrete, actionable guidelines to cost-effectively reduce stock-outs by implementing optimal supply chain policies. Preferentially selecting drug suppliers with short lead times accommodates unexpected changes in demand. Optimal supply chain management should be an essential component of national policy to reduce the mortality rate.

On the directional accuracy of inflation forecasts: evidence from South African survey data

ABSTRACTWe study the information content of South African inflation survey data by determining the directional accuracy of both short-term and long-term forecasts. We use relative operating characteristic (ROC) curves, which have been applied in a variety of fields including weather forecasting and radiology, to ascertain the directional accuracy of the forecasts. A ROC curve summarizes the directional accuracy of forecasts by comparing the rate of true signals (sensitivity) with the rate of false signals (one minus specifity). A ROC curve goes beyond market-timing tests widely studied in earlier research as this comparison is carried out for many alternative values of a decision criterion that discriminates between signals (of a rising inflation rate) and nonsignals (of an unchanged or a falling inflation rate). We find consistent evidence that forecasts contain information with respect to the subsequent direction of change of the inflation rate.

The relationship between negative household events and depressive symptoms: Evidence from South African longitudinal data

BackgroundThe relationship between negative life events and vulnerability to depression is not well-documented in developing countries, particularly using large-scale, longitudinal data. This study seeks to add to this literature by examining the relationship between negative household events and vulnerability to depression amongst a representative sample of South African adults for the period 2008–2012. MethodsData from three waves of the longitudinal South African National Income Dynamics Study (NIDS) were analysed to estimate the association between negative household events and adult depressive symptoms using ordinary least squares (OLS) and fixed-effects regression models. ResultsOne in four South Africans reported that they lived in a household where at least one household member had been seriously ill or injured, or where a household member, relative or friend had died within the previous two years. There was a significant association between the serious illness of a household member, or the death of a family member who provided financial assistance, and adult depression scores. LimitationsThe study used data collected in a large-scale household survey by field work teams. It is reliant on self-reported depressive symptoms that have not been validated by formal clinical diagnosis. ConclusionsThere are high rates of morbidity and mortality in South Africa, and adults living in households where family members are ill or have died are significantly more vulnerable to depression. These findings highlight the importance of providing counselling and psychiatric support not only to those directly affected by negative health events, but also to their family or household members.

Immigration and the Labor Market Outcomes of Natives in Developing Countries: A Case Study of South Africa

AbstractUsing South African census data from 2001, 2007, and 2011, I examine the effect that immigration had on labor market outcomes of native-born black South Africans. Using instrumental variables to control for the potential endogenous location choices of immigrants to South Africa, the results show that immigrant inflows decreased the employment-to-population ratios and total annual income of black native-born South Africans. Additionally, results suggest a negative effect of immigrant inflows on the employment ratio and total annual income of black native-born South Africans employed in the formal sector. Results show that immigration caused an intersectoral employment shift. For black male South Africans, the composition of the employed labor force shifted to the formal sector, and for black female South Africans, the composition of the employed labor force shifted to the informal sector.

Fractional Black–Scholes option pricing, volatility calibration and implied Hurst exponents in South African context

Background: Contingent claims on underlying assets are typically priced under a framework that assumes, inter alia, that the log returns of the underlying asset are normally distributed. However, many researchers have shown that this assumption is violated in practice. Such violations include the statistical properties of heavy tails, volatility clustering, leptokurtosis and long memory. This paper considers the pricing of contingent claims when the underlying is assumed to display long memory, an issue that has heretofore not received much attention.Aim: We address several theoretical and practical issues in option pricing and implied volatility calibration in a fractional Black–Scholes market. We introduce a novel eight-parameter fractional Black–Scholes-inspired (FBSI) model for the implied volatility surface, and consider in depth the issue of calibration. One of the main benefits of such a model is that it allows one to decompose implied volatility into an independent long-memory component – captured by an implied Hurst exponent – and a conditional implied volatility component. Such a decomposition has useful applications in the areas of derivatives trading, risk management, delta hedging and dynamic asset allocation.Setting: The proposed FBSI volatility model is calibrated to South African equity index options data as well as South African Rand/American Dollar currency options data. However, given the focus on the theoretical development of the model, the results in this paper are applicable across all financial markets.Methods: The FBSI model essentially combines a deterministic function form of the 1-year implied volatility skew with a separate deterministic function for the implied Hurst exponent, thus allowing one to model both observed implied volatility surfaces as well as decompose them into independent volatility and long-memory components respectively. Calibration of the model makes use of a quasi-explicit weighted least-squares optimisation routine.Results: It is shown that a fractional Black–Scholes model always admits a non-constant implied volatility term structure when the Hurst exponent is not 0.5, and that 1-year implied volatility is independent of the Hurst exponent and equivalent to fractional volatility. Furthermore, we show that the FBSI model fits the equity index implied volatility data very well but that a more flexible Hurst exponent parameterisation is required to fit accurately the currency implied volatility data.Conclusion: The FBSI model is an arbitrage-free deterministic volatility model that can accurately model equity index implied volatility. It also provides one with an estimate of the implied Hurst exponent, which could be very useful in derivatives trading and delta hedging.

Measuring Inequality by Asset Indices: A General Approach with Application to South Africa

Asset indices are widely used, particularly in the analysis of Demographic and Health Surveys, where they have been routinely constructed as “wealth indices.” Such indices have been externally validated in a number of contexts. Nevertheless, we show that they often fail an internal validity test, that is, ranking individuals with “rural” assets below individuals with no assets at all. We consider from first principles what sort of indexes might make sense, given the predominantly dummy variable nature of asset schedules. We show that there is, in fact, a way to construct an asset index which does not violate some basic principles and which also has the virtue that it can be used to construct “asset inequality” measures. However, there is a need to pay careful attention to the components of the index. We show this with South African data.